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Family business concession

You may be eligible for a transfer duty concession if you acquire business property from a family member with the intention of running that business.

The concession is available for:

  • primary production businesses
  • prescribed businesses.

Generally, you can’t claim a concession if you are acting as trustee or as an agent or nominee of another person.

Primary production

For the purposes of this concession, a business of primary production is one of agriculture, pasturage or dairy farming. To be eligible for the concession, you must acquire the business property directly from a defined relative.

The concession applies to all dutiable property used for the business of primary production. The concession also applies to any residential land that is on or adjacent to the farm. If you qualify, you won’t have to pay transfer duty on:

  • the transfer, or agreement for the transfer, of business property
  • partnership acquisitions, if the partnership is a family partnership that holds business property
  • trust acquisitions, if the trust is a family trust that holds business property
  • trust creations, if the trust is a family trust that holds business property.

Example

The owner of a dairy farming business sells his farm to his niece and her husband. They will continue to operate the business. The transfer includes:

  • land used for dairy farming
  • a water entitlement
  • an adjacent parcel of land on which the owner currently resides—this will become his niece and her husband’s residence
  • a herd of 200 Guernsey cows
  • plant, machinery and equipment used for dairy farming.

The concession applies to all of the above property because it is used for dairy farming and the transferees are defined relatives of the owner.

Prescribed business

To be eligible for the concession on a prescribed business, you must acquire business property from your (or your spouse’s) parent or grandparent.

The concession may apply to:

  • the transfer, or agreement for the transfer, of business property
  • partnership acquisitions, if the partnership is a family partnership that holds business property
  • trust acquisitions, if the trust is a family trust that holds business property
  • trust creations, if the trust is a family trust that holds business property.

If the unencumbered value of the business property is more than the consideration, the difference is treated as a gift. The concession applies to the first $500,000 of business property gifted since 12 December 1984. Transfer duty applies to the balance and any consideration payable.

Use the transfer duty calculator or transfer duty rates to find out how much duty you may have to pay.

Example

Sarah gifts a 50% interest in a cinema business to her daughter, Amy. The transferred business property is valued at $300,000. The concession applies and no duty is payable.

Ten years later, Sarah gifts her remaining interest in the business to Amy. The transferred business property is valued at $550,000. The concession applies to $500,000 for property gifted since 12 December 1984. Because Amy has previously received the concession to $300,000, she can only claim for $200,000 on the second transaction ($500,000 – $300,000). Duty is payable on the remaining $350,000.

How to claim the concession

Use these tools to determine if the family business concession applies to your transaction:

To claim the concession, you need to lodge:

  • the original documents (including any contracts, agreements or deeds of gift)
  • a family business concession (Form D2.5)
  • an identity details annexure for each non-Australian transferor and transferee, when transferring real property (e.g. homes, apartments, business premises and vacant land)
  • a valuation of the property (for prescribed business transfers only)
  • a covering letter outlining what documents you have lodged, your name and return address.

If there is no written agreement or transfer form, also lodge a transfer duty statement (Form D2.3) .

We will send you an assessment notice that outlines how much duty you need to pay.

Find out about lodging documents for assessment and stamping .

More information

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